Mercedes has owned the class-leading engine since the introduction of V6 power units in 2014. Ferrari fought Mercedes for the championship until the final stages of last season but has launched a stronger title challenge in 2018 and leads both the constructors' and drivers' standings after 10 races of the 21-race season.

Ferrari qualified within 0.1s of Mercedes' pole time at the British Grand Prix and managed to win the race, an event which saw customer teams Haas and Sauber show impressive pace in the midfield. Horner thinks the Italian manufacturer is now the team to beat.

"I think it's setting the benchmark now," Horner said when asked about Ferrari's engine. "Haas and Sauber as well having made good gains."

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While Mercedes and Ferrari engaged in a very tight fight for the victory at Silverstone, Red Bull -- powered by Renault -- was unable to reproduce its race-winning pace from the Austrian Grand Prix and had to settle for being a distant third. Despite claiming three races so far this year Horner thinks the team's championship chances took a significant blow at its home race.

When asked if he still felt Red Bull was just outside the title fight, he said: "We're probably further outside. It's still a long way to go."

Horner says Red Bull must maximise results from the circuits it knows it will be strongest on to stand any chance of still being in the fight at the end of the year.

"I think every third race, that's been the ratio so far. So if you go on that, Hungary we should have a chance, Singapore, Japan, they're ll tracks that theoretically should suit our strengths."